BROOKDALE SENIOR NYSE-BKD
TIMELINESS
SAFETY
TECHNICAL
4
4
3
High:
Low:
Lowered 12/11/15
RECENT
PRICE
31.7
23.0
54.3
29.3
49.9
27.5
NMF RELATIVE
DIV’D
Median: NMF) P/E RATIO NMF YLD
23.09 P/ERATIONMF(Trailing:
28.3
3.0
20.7
2.5
22.2
12.7
28.3
11.0
26.1
15.0
30.7
24.4
37.0
26.1
Nil
39.9
20.3
Target Price Range
2018 2019 2020
LEGENDS
8.0 x ″Cash Flow″ p sh
. . . . Relative Price Strength
Options: Yes
Shaded area indicates recession
Raised 6/14/13
Raised 12/11/15
BETA 1.50 (1.00 = Market)
VALUE
LINE
120
100
80
64
48
2018-20 PROJECTIONS
Ann’l Total
Price
Gain
Return
High
45 (+95%) 18%
Low
25 (+10%)
2%
Insider Decisions
to Buy
Options
to Sell
J
0
0
2
F M
0 0
0 0
4 10
A M
0 0
0 0
1 10
J
0
0
0
J
0
0
0
A
1
0
1
32
24
20
16
12
S
0
0
3
% TOT. RETURN 11/15
Institutional Decisions
1Q2015
2Q2015
3Q2015
152
161
133
to Buy
to Sell
126
111
154
Hld’s(000) 186451 187835 189694
Percent
shares
traded
30
20
10
1 yr.
3 yr.
5 yr.
Brookdale Senior Living Inc. was formed 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
in June 2005 for the purpose of combining 12.16 12.94 18.04 18.32 16.42 17.80 18.39 19.30 20.48 18.22 27.15 28.40
Brookdale Living Communities, Inc. and d.02
.79
1.35
1.16
1.67
1.96
1.60
1.47
2.13
2.11
3.05
3.60
Alterra Healthcare Corporation. It went pub- d.78 d1.34 d1.60 d1.51 d.60 d.41 d.56 d.54
d.03 d1.01 d1.70 d1.25
lic on November 22, 2005. 12,732,800
.25
1.55
1.95
1.25
------Nil
Nil
shares were issued in the initial public offer- 9.15 20.11 3.35 1.80
.95
.75
1.28
1.65
2.07
1.66
1.50
1.35
ing at $19.00 a share. A follow-on stock of- 9.70 17.42 13.93 9.13 8.82 8.53 8.30 7.91
8.21 15.70 13.95 14.20
fering occurred on July 20, 2006. 65.01 101.26 101.94 105.26 123.21 124.32 125.35 126.69 124.35 183.51 184.00 185.00
19,236,103 shares were issued at $39.50 a
---------- - Bold figures are
Value Line
share. The lead underwriters for both offer----------estimates
ings were Goldman Sachs and Lehman
-3.7%
4.7%
6.7%
------Brothers.
790.6 1309.9 1839.3 1928.1 2023.1 2213.3 2305.4 2445.1 2546.2 3343.5
5000
5250
CAPITAL STRUCTURE as of 9/30/15
Total Debt $6486.0 mill. Due in 5 Yrs $3515 mill.
LT Debt $6334.2 mill. LT Interest $300.0 mill.
(71% of Cap’l)
Leases, Uncapitalized Annual rentals $396.0 mill.
No Defined Pension Benefit Plan
Pfd Stock None
Common Stock 184,780,068 shs.
as of 11/5/15
MARKET CAP: $4.3 billion (Large Cap)
CURRENT POSITION 2013
2014
($MILL.)
Cash Assets
58.5
104.1
Receivables
104.3
149.7
132.1
361.0
Other E
Current Assets
294.9
614.8
Accts Payable
65.8
76.3
Debt Due
201.9
272.2
Other
603.1
529.3
Current Liab.
870.8
877.8
2012
2013
2014
2015
2016
Calendar
2012
2013
2014
2015
2016
Calendar
2011
2012
2013
2014
2015
11.0%
188.1
d108.1
-NMF
d238.7
1852.5
1764.0
NMF
NMF
NMF
NMF
14.1% 22.9% 15.5% 16.8% 16.2% 14.4%
299.9 276.2 271.9 292.3 268.5 252.3
d162.0 d153.6 d66.3 d48.9 d68.2 d65.7
------NMF
NMF
NMF
NMF
NMF
NMF
d258.0 d365.2 d371.9 d278.3 d340.1 d812.5
2317.2 2390.0 2459.3 2498.6 2416.0 2169.8
1419.5 960.6 1086.6 1060.0 1040.2 1002.7
NMF
NMF
NMF
.5%
NMF
NMF
NMF
NMF
NMF
NMF
NMF
NMF
NMF
NMF
NMF
NMF
NMF
NMF
NMF
NMF
-----
16.2%
268.8
d3.6
-NMF
d575.9
2434.6
1020.9
1.7%
NMF
NMF
--
13.5%
537.0
d149.0
-NMF
d263.0
5993.7
2881.7
NMF
NMF
NMF
--
17.0%
880
d315
NMF
NMF
d170
6300
2565
NMF
NMF
NMF
Nil
18.0%
905
d235
NMF
NMF
d200
5800
2630
NMF
NMF
NMF
Nil
VL ARITH.*
INDEX
-36.5
-12.1
17.6
-2.0
48.1
71.2
© VALUE LINE PUB. LLC
8
18-20
Revenues per sh
‘‘Cash Flow’’ per sh
Earnings per sh A
Div’ds Decl’d per sh B
Cap’l Spending per sh
Book Value per sh C
Common Shs Outst’g D
Avg Ann’l P/E Ratio
Relative P/E Ratio
Avg Ann’l Div’d Yield
30.55
5.65
.65
Nil
1.60
18.05
190.00
55.0
3.45
Nil
Revenues ($mill)
Operating Margin
Depreciation ($mill)
Net Profit ($mill)
Income Tax Rate
Net Profit Margin
Working Cap’l ($mill)
Long-Term Debt ($mill)
Shr. Equity ($mill)
Return on Total Cap’l
Return on Shr. Equity
Retained to Com Eq
All Div’ds to Net Prof
5800
21.0%
950
125
NMF
2.1%
d495
3300
3350
3.0%
3.5%
3.5%
Nil
BUSINESS: Brookdale Senior Living Incorporated, through its subsidiaries, operates senior living facilities in the United States. These
facilities offer residents a supportive home-like setting and assistance with activities of daily living. Also provides licensed nursing
services. Acquired Emeritus Corporation (7/14). The company currently owns 1149 communities in 46 states, including independent
and assisted living facilities. Has about 30,000 full-time employees.
All directors and executive officers jointly own 1.3% of common
stock (4/15 Proxy). Nonexecutive Chrmn.: Jeffrey R. Leeds. CEO:
T. Andrew Smith. Incorporated: Delaware. Address: 111 Westwood
Place, Suite 400, Brentwood, TN 37027. Telephone: 615-221-2250.
Internet: www.brookdaleliving.com.
Brookdale Senior Living has had a
rocky year. Occupancy remains a concern, even though the average rate for the
September quarter was 86.7%, a 20-basispoint sequential uptick. The company is
focusing on promotions to boost occupancy
at its Emeritus (acquired in August, 2014)
QUARTERLY REVENUES ($ mill.)
Full locations. Foregoing some pricing power in
Mar.31 Jun.30 Sep.30 Dec.31 Year the near term, average monthly revenue
604.3 609.9 613.3 617.6 2445.1 per unit fell 0.6%, sequentially. In turn,
632.1 628.7 638.7 646.7 2546.2 cash from facility operations declined one
657.7 661.0 965.9 1058.9 3343.5 cent, to $0.59 per share, while facility op1247.9 1238.2 1238.8 1275.1 5000 erating income dropped more than 2%. On
1300 1300 1300 1350 5250 the bright side, as aggressive promotional
EARNINGS PER SHARE A
Full incentives expire, often the company is left
Mar.31 Jun.30 Sep.30 Dec.31 Year with an in-place tenant at a more attracd.09
d.15
d.10
d.20
d.54 tive rate. Despite its efforts, occupancy
.03
d.04
d.01
d.01
d.03 remains below 2014 levels.
d.02
d.03
d.23
d.58 d1.01 The large-scale Emeritus integration
d.71
d.46
d.37 d.16 d1.70 has
not
gone
as
smoothly
as
d.45 d.30 d.30 d.20 d1.25 anticipated. Brookdale has been underQUARTERLY DIVIDENDS PAID
Full performing the industry on certain key
Mar.31 Jun.30 Sep.30 Dec.31 Year metrics over the last year, which management partially attributes to the distractions associated with the merger. These
NO CASH DIVIDENDS
BEING PAID
burdens ought to start to pass from here.
Systems integration work and training is
largely finished, which will allow associa-
tes to get back to day-to-day operations.
Moreover,
revenue
synergies
should
emerge in 2017, as Emeritus properties
are renovated and adopt the legacy Brookdale pricing model. In the meantime, investments that are necessary to facilitate
increased rates down the road will persist.
The company is exploring a variety of
capital allocation decisions, transactions, and alternative strategies. The
Emeritus integration will be completed
regardless of the path the company takes
from here. We think BKD will likely begin
by selling assets and using the proceeds to
deleverage its balance sheet.
Most investors should avoid these untimely shares at this juncture. The
share price has taken a beating lately, and
still might not represent a bottom. Longterm capital gains prospects are above
average, but the potential reward comes
with substantial risk (Safety: 4).
Jeffrey Hirt
December 11, 2015
CASH POSITION
5-Year Av’g
9/30/15
ANNUAL RATES Past
of change (per sh)
10 Yrs.
Revenues
6.5%
‘‘Cash Flow’’
11.0%
Earnings
-Dividends
-Book Value
33.0%
Calendar
9/30/15
3.2%
49.9
d50.9
-NMF
d25.5
754.2
630.4
NMF
NMF
NMF
NMF
THIS
STOCK
70.4
152.6
255.1
478.1
89.1
151.8
475.2
716.1
Past Est’d ’12-’14
5 Yrs.
to ’18-’20
2.0%
8.0%
6.5% 20.0%
-NMF
-Nil
-9.5%
(A) Diluted earnings. May not sum due to
changes in share count. Excludes nonrecurring gains and (losses): ’08, ($2.16). Next
earnings report due early February. (B)
Current Assets to Current Liabilities:
Cash & Equiv’s to Current Liabilities:
Working Capital to Sales:
Dividends suspended in 2009. (C) Includes (E) Incl. current restr. cash assets: ’13, $38.2
intangibles: In ’14: $891.6 million, $4.86 a mill.; ’14, $38.9 mill.; 6/30/15, $42.1 mill.
share.
(D) In millions.
© 2015 Value Line, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber’s own, non-commercial, internal use. No part
of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.
43%
9%
NMF
Company’s Financial Strength
Stock’s Price Stability
Price Growth Persistence
Earnings Predictability
67%
10%
NMF
C++
25
45
25
To subscribe call 1-800-VALUELINE